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Thu Sep 12, 2019, 01:55 AM

Confusion and Defiance Follow California's New Contractor Law


After months of bickering over who would be covered by a landmark bill meant to protect workers, California legislators passed legislation on Wednesday that could help hundreds of thousands of independent contractors become employees and earn a minimum wage, overtime pay and other benefits.

But even before California’s governor, Gavin Newsom, had signed it into law, the battle over who would be covered flared up again. Uber, one of the main targets of the legislation, declared that the law’s key provisions would not apply to its drivers, setting off a debate that could have wide economic ramifications for businesses and workers alike in California, and potentially well beyond as lawmakers in other states seek to make similar changes.

“California sets off a chain reaction,” said Dan Ives, a managing director of equity research at Wedbush who tracks the ride-hailing industry. “The worry is that the wildfire spreads.”


Carrying out the mandate will most likely be anything but orderly. Companies in dozens of industries must decide whether or not to comply pre-emptively or risk being sued by workers and state officials. Some workers may find that their schedules and job descriptions change, while others may be out of a job altogether if their employers cut back hiring amid rising costs.

Basically: Uber is saying pre-emptively that this law doesn't apply to them. Should be fun.

(Now, the joke? Medallion cab drivers are "exempt", and "get" to remain contractors... and the argument for that is precisely the argument Uber is making, that a taxi medallion owner's core business isn't "driving people around" but "renting out medallions to drivers".)

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